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SAN CLEMENTE, Calif. - CareTrust REIT, Inc. (NYSE:CTRE), a real estate investment trust specializing in healthcare-related properties, has announced the acquisition of two California-based senior care facilities in separate transactions totaling approximately $55 million. The company, currently valued at $5.3 billion, maintains impressive financial health with a "GREAT" rating according to InvestingPro metrics, supported by strong liquidity and a 93.7% gross profit margin.
The company revealed that on Monday, it completed the purchase of a skilled nursing and assisted living campus in Los Alamitos, comprising a 150-bed skilled nursing facility and a 140-bed residential care facility for the elderly. This acquisition was made through a joint venture with a third-party healthcare real estate owner, with CareTrust contributing about $34 million in combined equity investments. The initial yield on these investments is approximately 9.7%. The facility is now leased to affiliates of The Ensign Group (NASDAQ: ENSG) under a new 15-year triple-net lease that includes extension options and annual escalators based on the Consumer Price Index (CPI). This expansion aligns with CareTrust’s strong performance, having achieved 36% revenue growth in the last twelve months and maintaining a healthy 4.7% dividend yield with nine consecutive years of dividend increases.
Additionally, on March 1, 2025, CareTrust acquired a 160-bed residential care facility for the elderly in Concord for around $20.6 million, inclusive of transaction costs. This facility has been added to CareTrust’s existing master lease with Kalesta Healthcare Group affiliates, with an annual cash rent of approximately $1.9 million for the first year, also subject to CPI-based annual escalators.
James Callister, Chief Investment Officer of CareTrust, expressed enthusiasm for adding "two additional, solidly-performing facilities" to their portfolio and expanding relationships with both The Ensign Group and Kalesta Healthcare Group.
The investments were funded using cash on hand, indicating a strong liquidity position for CareTrust. The company, which operates across the United States and internationally, focuses on leasing properties to a diverse group of healthcare operators.
This expansion underscores CareTrust’s strategy of growth through strategic acquisitions and partnerships with leading healthcare operators. The company’s portfolio includes a variety of long-term net-leased properties, and this latest move is part of its ongoing mission to match investment opportunities with top-tier operators.
The information for this article is based on a press release statement from CareTrust REIT, Inc.
In other recent news, CareTrust REIT has announced a significant acquisition of UK-based Care REIT, expected to add approximately $66 million in yearly contractual rent to its portfolio. This expansion into the UK market will include 137 care homes and is anticipated to enhance the company’s geographic and operator diversification. Fitch Ratings has placed CareTrust REIT’s ratings on a positive watch following the acquisition announcement, citing strong financial flexibility and low leverage as supportive factors. Raymond James has maintained a Strong Buy rating with a $35 price target for CareTrust REIT, noting the strategic benefits of the UK expansion and its potential for future growth. Meanwhile, BMO Capital Markets has kept a Market Perform rating and a $31 target, acknowledging the aggressive pricing of the acquisition but viewing it as a diversification strategy. KeyBanc Capital Markets adjusted its price target to $33, maintaining an Overweight rating, and highlighted CareTrust’s robust investment pipeline despite potential Medicaid cuts. Additionally, CareTrust REIT has launched a $750 million equity distribution program, allowing the sale of common stock shares to support general corporate purposes, including acquisitions and debt repayment. The company plans to utilize this program for future growth opportunities, reflecting its proactive approach to expanding its asset base.
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